The private finance initiative for housing is set to grow to the expected £1.5bn over the next four years, despite the government suffering an embarrassing defeat over the use of private money
Nearly 70% of delegates voted against PFI at the Labour conference, instead demanding an inquiry into the PFI. Unions were particularly angry at private finance being used in major infrastructure projects such as hospitals and schools.

Housing PFI experts responded to concerns from public sector unions Unison and the GMB by saying that any changes in the policy would involve an increase, rather than a decrease, of funds.

Steve Trueman, executive director of government agency the 4Ps, said: “Housing PFI is more likely to expand in the future, given the recent increase in funding and Prescott’s review of housing delivery methods.” He added that, to date, the issues surrounding bidding costs hadn’t discouraged private sector firms from bidding for PFI contracts.

He said union concerns were “nothing new” and that the initially sluggish delivery in the eight first round PFI projects would improve.

As part of the July spending review, the government increased the funding for housing PFI to £1.5bn by 2004/5. There are currently two rounds of housing PFI, involving 20 councils.

  • The government is keen to encourage voluntary organisations to take on a greater role in the contracted provision of public services.

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    Housing Today